Hoyer Offers to Open Discussions on How Raises Are Determined

Rep. Steny H. Hoyer (D-Md.), one of the architects of today's white-collar pay system for federal workers, told the Bush administration yesterday that he is ready to discuss a different way of setting annual pay raises.

By most accounts, a 1990 pay law -- designed to bring federal salaries in line with those in the private sector -- has not worked as intended. That has left Congress and the White House to negotiate pay raises each year, a sometimes-contentious process.

Hoyer's offer to begin a debate on the future of federal pay -- which is not his first -- comes just a month before President Bush releases his plan for the 2006 federal pay raise. Bush officials have chafed at the practice of annual, across-the-board increases, contending that job performance should play a larger role in determining raises.

A part of the conflict stems from a 1990 law that established a pay-raise formula for the government's 1.8 million General Schedule employees. The law, the Federal Employees Pay Comparability Act, has been only partly implemented -- in part because officials in the Clinton and Bush administrations have faulted the law's methodology and its price tag.

Yet the law did establish the practice of "locality pay" adjustments and the concept that rank-and-file employees could be paid at different rates linked to local labor market conditions.

Hoyer made his offer for pay talks in a letter yesterday to the president's chief adviser on federal management policy, Clay Johnson III, a deputy at the Office of Management and Budget.

"Every administration with which I have dealt since FEPCA was enacted has maintained that FEPCA does not accurately value the work of federal civilian employees compared to the work performed by their private sector counterparts," Hoyer wrote. "My response has been to invite an alternative proposal that is believed to be more accurate. In the 14 years FEPCA has been the law, no alternative proposal has ever been advanced."

Hoyer said he had brought the issue up at least twice before with the Bush administration but had received no response. "I am prepared to discuss the administration's objectives regarding 'pay-for-performance' and the implementation of FEPCA," Hoyer told Johnson.

Chad Kolton, an OMB spokesman, said the letter was under review. He said that Johnson has spoken with Hoyer and other members of Congress about federal pay and that Johnson is open to further conversations "on how to structure pay to effectively recruit and retain employees."

Any debate on how to revamp federal pay, however, may be put on hold until Congress has time to judge changes planned for the Departments of Defense and Homeland Security. The agencies will soon publish their plans for overhauling their pay systems and giving managers more discretion in setting salaries. The changes will take at least two years to complete.

Last year, Hoyer, who is the House Democratic whip, and other leaders of the Washington area delegation balked at Bush's proposed 2005 raise. Bush's budget called for a 1.5 percent pay raise, but Congress settled on a 3.5 percent raise for the civil service, on par with the raise that Bush supported for the military.

There's little doubt that the president's budget for 2006 will fall short of meeting the goals laid out in the 1990 pay law, primarily because of cost considerations.

According to the most recent calculations by a federal advisory group, it would take a raise of 16 percent, on average, to close the salary gap between federal jobs and their nonfederal counterparts.

In his letter, Hoyer suggested that he and other members of a bipartisan coalition will seek to ensure that civil service and military personnel receive equal raises next year.

If Congress and the White House follow the 1990 pay law formula for 2006, GS employees will receive an across-the-board raise of 2.1 percent and a locality adjustment. Military personnel, who are paid under a separate process, are in line for a 3.1 percent raise.